Citation : 2025 Latest Caselaw 2765 Kant
Judgement Date : 23 January, 2025
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 23RD DAY OF JANUARY, 2025
PRESENT
THE HON'BLE MR. N. V. ANJARIA, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE K. V. ARAVIND
WRIT APPEAL No.971 OF 2024 (GM-RES)
C/W
CCC No.608 OF 2024 (CIVIL)
IN WA No.971/2024
BETWEEN:
1. DEPUTY COMMISSIONER/
RETURNING OFFICER,
24 - BENGALURU NORTH MP CONSTITUENCY,
BENGALURU URBAN DISTRICT,
BENGALURU - 560009.
2. TAHASILDAR/
ELECTORAL REGISTRATION OFFICER (ERO),
150- YELAHANKA CONSTITUENCY,
BYATARAYANAPURA,
YELAHANKA ZONE,
BENGALURU - 560092.
3. TAHASILDAR/
ELECTORAL REGISTRATION OFFICER (ERO),
155- DASARAHALLI CONSTITUENCY,
BBMP DASARHALL ZONE, OFFICE BUILDING,
HESARUGHATTA MAIN ROAD,
BAGALAGUNTE,
BENGALURU - 560073.
4. TAHASILDAR/
ELECTORAL REGISTRATION OFFICER (ERO),
-2-
171 -MMAHADEVAPURA CONSTITUENCY,
BENGALURUEAST TALUK, K. R. PURA,
BENGALURU - 560063.
5. TAHSILDAR / REVENUE OFFICER /
ELECTORAL REGISTRATION OFFICER (ERO),
176-BENGALURU SOUTH CONSTITUENCY,
BENGALURU SOUTH SUB DIVISION,
KANDHAYA BHAVANA, 2ND FLOOR,
K.G. ROAD, BENGALURU 560009.
6. TAHSILDAR/ELECTORAL REGISTRATION OFFICER (ERO),
177- ANEKAL CONSTITUENCY,
ANEKAL TALUK, ANEKAL,
BENGALUR - 562106.
7. CHIEF ELECTORAL OFFICER,
ELECTION COMMISSION OF INDIA,
NIRVACHANA NILAYA, SHESADRI ROAD,
AMBEDKAR VEEDHI,
BENGALURU 560001,
[email protected].
8. ADDITIONAL DISTRICT ELECTORAL OFFICER (ADC),
BENGALURU URBAN DISTRICT,
BENGALURU 560009.
...APPELLANTS
(BY SRI KIRAN V. RON, AAG A/W
SRI K.S. HARISH, GOVERNMENT ADVOCATE)
AND:
1. M/S DREAMS OF FOUNTAINS PVT. LTD.,
FORMERLY KNOWN AS:
M/S CHILUME ENTERPRICES PVT. LIMITED AND
DAP HOMBALE PVT. LTD.,
COMAPNY REGISTERED UNDER THE
PROVISION OF COMPANIES ACT, 2013,
HAVING ITS REGISTERED OFFICE AT
No.161/1, 2ND MAIN, 17TH CROSS,
BEHIND SHEKAR NURSING HOME,
MALLESHWARAM, BENGALURU 560003,
REP. BY ITS DIRECTOR,
SHRUTHI B.,
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2. ASSISTANT RETURNING OFFICER (ARO),
150- YALAHANKA CONSTITUENCY,
MINI VIDHANA SOUDHA,
YALAHANKA ZONE,
BENGALURU 560064.
3. ASSISTANT RETURNING OFFICER (ARO),
152-BYTARAYANAPURA CONSTITUENCY,
BYTARAYANAPURA, YALAHANKA ZONE,
BENGALURU 560092.
4. ASSISTANT RETURNING OFFICER (ARO),
153-YESHWANTHAPURA CONSTITUENCY,
No.569 AND 570, 2ND FLOOR,
KENGERI, SATELLITE TOWN,
BENGALURU 560060.
5. ASSISTANT RETURNING OFFICER (ARO),
155-DASARAHALLI CONSTITUENCY,
BBMP DASARAHALLI ZONE,
OFFICE BUILDING,
HESARUGHATTA MAIN ROAD,
BAGALAGUNTE,
BENGALURU 560073.
6. ASSISTANT RETURNING OFFICER (ARO),
174-MAHADEVAPURA CONSTITUENCY,
BENGALURU EAST TALUK,
K. R. PURA, BENGALURU 560036.
7. ASSISTANT RETURNING OFFICER (ARO),
176-BENGALURU SOUTH CONSTITUENCY,
BENGALURU SOUTH SUB DIVISION,
KANDHAYA BHAVANA, 2ND FLOOR,
K G ROAD, BENGALURU 560009.
8. ASSISTANT RETURNING OFFICER (ARO),
177-ANEKAL CONSTITUENCY,
ANEKAL TALUK, ANEKAL,
BENGALURU 562106.
9. REVENUE OFFICER / ELECTROL
REGISTRATION OFFICER (ERO),
152 BYATARAYANPURA, YELAHANKA ZONE,
BENGALURU - 560092.
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10 . ELECTROAL REGISTRATION OFFICER (ERO),
153-YESHWANTHAPURA CONSTITUENCY,
No.569 AND 570, 2ND FLOOR,
KENGERI, SATELLITE TOWN,
BENGALURU 560060.
11 . CHIEF ELECTION COMMISSIONER,
ELECTION COMMISSION OF INDIA,
NIRVACHAN SADAN, ASHOKA ROAD,
NEW DELHI - 110001.
RESPONDENTS
(BY SRI PRABHULING K. NAVADAGI, SENIOR COUNSEL A/W SRI PRITHVEESH M.K., ADVOCATE FOR R1;
SRI S.R. DODDAWAD, ADVOCATE FOR R11;
(R2-R10 MEMO FOR DISPENSATION SERVICE OF NOTICE FILED ON 25.11.2024))
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED 28.05.2024 PASSED BY THE LEARNED SINGLE JUDGE OF THIS HON'BLE COURT IN WP No-26881/2023 AND CONSEQUENTLY ALLOW THE PRESENT WRIT APPEAL.
BETWEEN:
1. M/S DREAMS OF FOUNTAINS PVT. LTD., FORMERLY KNOWN AS:
M/S CHILUME ENTERPRICES PVT. LIMITED AND DAP HOMBALE PVT. LTD., COMAPNY REGISTERED UNDER THE PROVISION OF COMPANIES ACT, 2013, HAVING ITS REGISTERED OFFICE AT No.161/1, 2ND MAIN, 17TH CROSS, BEHIND SHEKAR NURSING HOME, MALLESHWARAM, BENGALURU 560003, REPRESENTED BY ITS DIRECTOR, SHRUTHI B., ...COMPLAINANT
(BY SRI PRABHULING K NAVADAGI, SENIOR COUNSEL A/W SRI PRITHVEESH M. K.,)
AND:
1. MR. DAYANANDHA K. A., DEPUTY COMMISSIONER/RETURNING OFFICER, 24-BENGALURU NORTH MP CONSTITUENCY, BENGALURU URBAN DISTRICT, BENGALURU 560009.
2. MR. MANOJKUMAR MEENA, CHIEF ELECTORAL OFFICER, KARNATAKA NIRVACHANA NILAYA, SHESADRI ROAD, AMBEDKAR VEEDHI, BENGALURU 560001.
EMAIL: CEO [email protected].,
3. STATE OF KARNATAKA, REPRESENTED BY ITS CHIEF SECRETARY, ROOM No. 320, 3RD FLOOR, VIDHANASOUDHA, BANGALORE-01.
...ACCUSED
(BY SRI KIRAN V RON, AAG A/W SRI K.S. HARISH, GOVERNMENT ADVOCATE FOR R1 & R3; SRI S.R. DODDAWAD, ADVOCATE FOR R2;
A2 TO R10 MEMO FOR DISPENSATION SERVICE OF NOTICE FILED ON 25.11.2024))
THIS CCC IS FILED UNDER SECTIONS 11 AND 12 OF THE CONTEMPT OF COURTS ACT, 1971, BY THE COMPLAINANT PRAYING TO NOTICE TO THE ACCUSED No.1 AS THE ACCUSED No.1 HAVE DELIBERATELY AND INTENTIONALLY DISOBEYED THE ORDER PASSED BY THIS HON'BLE COURT DATED 28.05.2024 IN W.P.No.26881/2023 (ANNEXURE-A) AND FURTHER DIRECT THE ACCUSED No.1 TO COMPLY THE ORDERS DATED 28.05.2024 PASSED IN W.P.No.26881/2023 (ANNEXURE-A) AND THE PUNISH THE ACCUSED No.1 UNDER THE CONTEMPT COURTS ACT, 1971.
THESE WRIT APPEAL AND CCC HAVING BEEN HEARD AND RESERVED FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS DAY, JUDGMENT WAS PRONOUNCED AS UNDER:
CORAM: HON'BLE THE CHIEF JUSTICE MR. JUSTICE N. V. ANJARIA and HON'BLE MR. JUSTICE K. V. ARAVIND
C.A.V. JUDGMENT
(PER: HON'BLE MR. JUSTICE K. V. ARAVIND)
Heard learned Additional Advocate General Mr. Kiran V Ron
along with learned Government Advocate Mr. K.S.Harish for the
appellants, learned Senior Advocate Mr. Prabhuling K Navadagi
along with learned advocate Mr. M.K.Prithveesh for respondent
No.1 and learned advocate Mr. S.R.Doddawad for respondent
No.11.
2. This appeal is directed against the order of learned Single
Judge in Writ Petition No.26881 of 2023 dated 28.05.2024.
Respondent No.1 preferred writ petition against the appellants and
respondent Nos.2 to 11 praying direction to release the payments
in terms of the proceedings dated 13.12.2019 of appellant No.1
herein along with interest at 18% p.a. till the date of payment.
3. Appellant No.1 invited tenders for various services during the
Parliamentary Elections of 2019. The multiple tenders were related
to the installation of various electronic devices, supply of
manpower, stationery and food. The present petition concerns the
tender for the supply of food items namely, three meals, snacks,
mineral water, coffee and tea to the election staff during meetings
and training. The supply was to cover 7 assembly constituencies in
Bangalore Urban District. Petitioner-respondent No.1 participated
in the tender, emerged as the successful bidder with the least bid
quote and was awarded work.
4. Respondent No.1, after conclusion of the election, submitted
bills raising 348 invoices which were certified by the Assistant
Returning Officer and Electoral Registration Officer. Appellant
No.1-Deputy Commissioner convened a meeting of respondent
No.1 and Returning Officers. The total bills submitted by
respondent No.1 were for an amount of Rs.15,01,78,000/-, upon
negotiation, the same was reduced to Rs.14,21,08,000/- at the
instance of appellant No.1 and was subject to the condition that the
agreed payment would be cleared within seven days.
4.1 However, the petitioner was paid a sum of Rs.3 crores. The
repeated representations made to pay the remaining amount of
Rs.10,81,47,606/- was not considered. Hence, the writ petition
was preferred. Learned Single Judge considering the host of
aspects where the bills submitted were endorsed to be correct by
the respective authorities and the dispute arose in light of the audit
objection on hyper technical grounds, directed appellant No.1-
Deputy Commissioner to release the amount of Rs.10,81,47,606/-
with interest at the Bank rate till the date of payment.
5. Learned Additional Advocate General Mr. Kiran V Ron along
with learned Government Advocate Mr. K.S.Harish appearing for
the appellants submits that the writ petition was not maintainable
as the amount in question arises out of a contract. The nature of
the dispute is to be adjudicated by a civil court and in a case where
disputed facts are involved, the exercise of jurisdiction under Article
226 of the Constitution of India is impermissible.
5.1 Learned AAG further submits that the meeting was
convened, the total claim made through the bills raised was
negotiated. The total amount was determined by the joint audit
conducted by the Joint Chief Electoral Officer, Additional Chief
Electoral Officer and Chief Electoral Officer, Zilla Parishat,
Bengaluru Urban, wherein the value of services and supplies were
considered. The amounts due towards respondent No.1 were paid
in intervals. The claim made in the writ petition to release a sum of
Rs.10,81,47,606/- is without considering and without providing set
of the amounts already paid.
5.2 Learned advocate for the appellants further submits that the
bills raised by respondent No.1 were highly inflated. Hence, the
bills were revised after audit and verification. If compared with the
expenditure incurred in the preceding years, the bills raised
towards the supply of materials and services in connection with the
General Elections to Lok Sabha 2019 are notably exorbitant.
6. Learned Senior Advocate Mr. Prabhuling K Navadagi along
with learned advocate Mr. M.K.Prithveesh appearing for
respondent No.1 submits that work orders were issued to
respondent No.1 to supply various materials and food.
Respondent No.1 has completed all the services and supplies as
per the contract. Learned Senior Advocate further submits that
bills were submitted to appellant No.1 after certification by
Assistant Returning Officers and other authorities in terms of the
work order. All 348 bills submitted are verified, approved and
counter-signed by the concerned officers before being sent to
appellant No.1. Appellant No.1 has certified bills and approved for
payment and ordered to release the amount. It is further submitted
that appellant No.1 has issued a work completion certificate.
6.1 The amount in question is the figure arrived on negotiation at
the instance of appellant No.1. In that view, there is no dispute on
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the amount in due. Learned Senior Advocate further submits that
appellant No.1 having certified and approved the bills for payment
and issued completion certificate, it is not open to raise the dispute
on the correctness of the claim made in the bills.
6.2 Learned Senior Advocate further submits that appellant No.1
has conducted the verification of the pending bills, negotiated with
respondent No.1 and proceedings have been drawn on 13.12.2019
determining a sum of Rs.14,21,08,000/- as payable to respondent
No.1. Under these proceedings, the dues were crystallized. The
departure from the above proceedings based on the audit report is
only to delay the payment.
6.3 Learned Senior Advocate further submits that when there is
no dispute to the contract terms entered into by the State, it is open
for the Court to direct the State to perform the contract in the
exercise of jurisdiction under Article 226 of the Constitution of
India. It is the further submission of the learned Senior Advocate
that the very issue of the inflation of bills has been replied by
appellant No.1 in a communication to the Chief Electoral Officer
dated 11.02.2020 wherein, it is explained as to how the supply of
food has increased manifold.
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7. A memo dated 25.11.2024 is filed by learned advocate for
the appellants to dispense service of notice to respondent Nos.2 to
10. Hence, no notice is issued to respondent Nos.2 to 10.
8. Heard learned counsel for the parties. There is no dispute
concerning the tender process, the eligibility of respondent No. 1,
the award of the contract, or the completion of the supply and
service obligations. The appellants contend that the dispute
involves factual issues and monetary claims under a commercial
contract, which cannot be adjudicated under Article 226 of the
Constitution of India. Additionally, they allege that the invoices for
food supply are inflated, citing discrepancies in the number of
election personnel claimed to have been served compared to those
actually deployed.
9. The work orders are part of the writ petition, covering various
supplies and services. Reference is made to the work order dated
02.03.2019, at Annexure-E, to examine and evaluate the conditions
outlined in the order. The work order details the quoted rate per
unit and enumerates the items to be supplied, which include
coffee/tea, breakfast, lunch, light refreshments, and drinking water.
The work order specifies that the food must be delivered directly to
the offices of the District Magistrates of Bangalore Urban District,
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as well as to the assembly constituencies of Yelahanka,
Byatarayanapura, Yeshwanthpur, Dasarahalli, Mahadevapura,
Bangalore South, and Anekal. Upon completion of the supply, a
confirmation letter from the respective electoral registration officers
is required to be submitted to the office of appellant No. 1.
Additionally, the conditions mandate arrangement to supply extra
food, as necessary, at the specified rate.
10. The appellants have submitted additional documents along
with an affidavit filed on 22.10.2024, which includes the tax
invoices raised by respondent No. 1. The invoices detail the date of
supply, the units of food, snacks, coffee/tea, light refreshments,
meals, and water. These invoices have been certified for both the
quantity and quality of the supply. The appellants contend that the
supply is inflated in relation to the staff deployed for election duty,
asserting that the units supplied exceed the actual number of
election staff. However, this contention is neither substantiated nor
sustainable for more than one reason. Firstly, neither the tender
conditions nor the work order specifies the exact number of units to
be supplied. The work order, however, mandates respondent No. 1
to supply additional food if required. A reading of condition No. 2 of
the work order reveals that the number of units to be supplied will
be based on the requirements of the electoral registration officers
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and the extent of the supply will be confirmed by them. Upon
examination of the work order, it is apparent that only the rate per
unit is fixed and respondent No. 1 is obligated to supply at the
quoted rate. The number of units to be supplied is to be
determined based on the daily requirements, as assessed by the
electoral registration officers. Consequently, the appellants'
contention that the supply of food is inflated beyond the number of
election officers deployed is found to be without merit and is,
therefore, rejected.
11. As per the conditions under the work order, the power to
requisition supplies is vested with the electoral registration officers.
These officers have issued a certificate confirming the supply in
terms of both quantity and quality. It is not within the purview of
appellant No. 1 to dispute the number of units supplied. The
attempt by appellant No. 1 to raise such a dispute is, therefore,
unsustainable. The conditions in the work order are as below;
"Subject: Regarding the arrangement of meals in connection with the upcoming General Lok Sabha Elections-2019.
Reference: .......
Conditions:
1) ......
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2) As mentioned in the above column, arrange for the food supply directly to the offices of the District Magistrates of Bangalore Urban District and the assembly constituencies of 150-Yelahanka, 152- Byatarayanapura, 153- Yeshwanthpur, 155- Dasarahalli, 174-Mahadevapura, 176-Bangalore South, and 177-Anekal. Obtain a confirmation letter from the respective electoral registration officers and submit it to this office. No payment will be made. Separate transportation costs will not be paid for the supply.
3) In case additional food arrangements are required, supply them at the specified rate.
4) No advance payment of any kind will be made before supplying the materials. The full amount of the bill will be paid only after all the materials are supplied to the respective assembly constituencies.
5) If any defect is found in the supplied materials or if the quantity supplied is less than the requirement, the supplier must re-supply the same to the respective assembly constituencies at their own expense within the stipulated time. Additionally, no extra payment will be made.
Sd/-
B. M. Vijay Shankar, Deputy Commissioner, Bengaluru District, Bengaluru"
12. The Court finds another valid ground to reject the appellants'
contention. Appellant No. 1 had invited respondent No. 1 for
negotiations, during which the total bill amount of Rs.
15,01,78,000/- was reduced to Rs. 14,21,08,000/-, with an
agreement to make payment within 7 days. These facts are
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recorded in the proceedings dated 13.12.2019. Further, in
compliance with the negotiated terms, a payment of approximately
Rs. 3 crores was made, leaving a balance of Rs. 10,81,47,606/-. If
appellant No. 1 had any issues regarding the correctness of the
claim concerning the number of units supplied, there was no
hindrance in raising such concerns during the negotiation
proceedings recorded on 13.12.2019.
13. Respondent No. 1 has raised the contention that the grounds
put forth by appellant No. 1 for clearing the bills are frivolous and
aimed at prolonging the payment. The Court finds some merit in
this contention, particularly in light of the communication from
respondent No. 1 to the Chief Electoral Officer dated 11.02.2020,
which is annexed as Annexure-B. Appellant No. 1 has explicitly
stated that the bills raised by respondent No. 1 pertain to the
supply of food for 7 assembly constituencies covering 2997 polling
booths. The justification for the high number of units supplied is
explained that, during the election exigencies, food was provided to
the driver, office staff, Group-D employees, and official staff
involved in the mustering and de-mustering work, in accordance
with the orders of the previous Deputy Commissioner. It was further
explained that without arrangements for lunch and breakfast, the
effectiveness of election work would be hampered, as election staff
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would have to leave the office premises for meals, thereby
disrupting the work. The supply of food was also made on
humanitarian grounds. The Court finds no justifiable reason to
accept the grounds raised in this appeal that contradict this
explanation. Appellant No. 1, being well-versed in the conduct of
elections and the associated staffing requirements and facilities,
could not have been unaware of the arrangements made for the
election workforce. Therefore, the claim of inflated food supplies is
not only unsustainable but appears to be an arbitrary exercise.
14. The Learned Single Judge, after considering the above
aspects and the serious prejudice caused to respondent No. 1 due
to the delay in settling the bills, has directed the settlement of the
bills with applicable bank interest. The Learned Single Judge
correctly observed that the dispute was raised only after the supply
was completed, and the competent authority had certified both the
quantity and quality. Furthermore, negotiations were held
concerning the amounts raised in the bills, leading to the reduction
of some amounts, with an agreement to pay the settled amount
within the stipulated time. In light of these proceedings, the ground
regarding inflation is not sustainable. The Learned Single Judge,
taking into account the timing of the supply and the possible
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financial implications for respondent No. 1, has justifiably directed
that the bills be settled with interest within four weeks.
15. Insofar as the contention raised regarding the maintainability
of the writ petition in contract matters, this contention is rejected for
the reasons outlined below. The eligibility, issuance of the supply
order, completion of supply in terms of its quantity and quality, and
certification of such supply by the competent authorities are
undisputed. Appellant No. 1 has provided an explanation regarding
the increase in the number of food units and the necessity for the
same. The explanation is available on record at page No.822. The
same is extracted herein for convenience;
"...... During the election exigency, driver, staff of the office, the Group D employees and the official staff for the mustering de mustering work have been provided food as per the orders of the previous DC. If there is no arrangement for lunch/breakfast, the effectiveness of election works will be hampered on account of the election staff leaving the office premises for breakfast and lunch and the food is also provided on the basis of humanity."
16. Following this, a negotiation meeting was held, during which
respondent No. 1 was persuaded to reduce the bill amount, which
was duly accepted and reduced, with the condition of payment
within 7 days. Despite these developments, when the time came
for payment, the issue of inflation of food units was raised, which
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contradicted appellant No.1's own records. The contention of
respondent No.1 that the frivolous ground of inflation was raised
solely to prolong the payment, cannot be dismissed outright, given
the material available before the Court. The action of appellant No.
1 in failing to settle the bill amounts can only be described as an
arbitrary exercise.
17. Though it is a settled principle that contracts cannot be
interfered with while exercising jurisdiction under Article 226 of the
Constitution of India, it is also well-established that when contracts
have been entered into between private parties and the State, and
the Court finds that the State has not acted fairly, judicial
intervention becomes necessary to inspire confidence among
participants to engage in the tender process. The restrictions on
interference, as observed by the Hon'ble Supreme Court, primarily
relate to the nascent stage, when examining the correctness or
otherwise of the terms and conditions of the tender notification.
18. The scope of interference by the Court in exercise of
jurisdiction under Article 226 of the Constitution of India has been
considered by Hon'ble Supreme Court in the case of Subodh
Kumar Singh Rathour vs. Chief Executive Officer and Others
[2024 SCC Online SC 1682]. The Hon'ble Supreme Court has
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held that the contracts entered into by the State with the private
parties is to be dealt by the State without any arbitrary and ill
motive. When the action of the State in dealing with the contract is
arbitrary and unreasonable, it is for the Court to protect the binding
nature of the contract, failing which would erode public faith in the
contracts and tenders. Arbitrary actions would create uncertainty
and unpredictability, thereby discouraging public participation. The
reluctance in private parties participating in the public procurement
processes will lead to negative impact on the ventures and the
public would have to bear the brunt thereby frustrating the very
object of public interest. The State cannot be allowed to reeling out
of the contractual obligations beyond the terms of the contract
merely the State have executive powers to exercise. When the
powers exercised by the State is tested on reasonableness, if
found, unjustifiable and arbitrariness in the decision, the contract
can be saved in exercise of jurisdiction under Article 226 of the
Constitution of India.
19. The jurisdiction exercised by the learned Single Judge under
Article 226 of the Constitution of India is justified. In light of the
aforementioned reasons, this Court holds that the findings recorded
and the reasons assigned by the learned Single Judge are valid
and justifiable and well-founded. No grounds have been made out
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to warrant interference. Furthermore, no error can be booked from
the order.
20. Consequently, the writ appeal must fail and accordingly, it is
dismissed.
21. The appellants are granted six weeks from today to comply
with the directions of learned Single Judge in Writ Petition No.
26881 of 2023, dated 28.05.2024.
In view of dismissal of the appeal, the interlocutory
application would not survive and it stands accordingly disposed of.
In view of the order in Writ Appeal No.971 of 2024, the
Contempt Petition No.608 of 2024 would not survive for
consideration and the same is dismissed.
Sd/-
CHIEF JUSTICE
Sd/-
JUDGE
DDU
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